With the release of Sinopec's 2020 semi-annual report, the "three barrels of oil" mid-year report card has been fully disclosed.
In the first half of this year, the "three barrels of oil" report card is not optimistic: PetroChina and Sinopec have a combined loss of more than 50 billion yuan, and CNOOC has achieved a net profit of 10.383 billion yuan, but its performance has also fallen sharply compared to the same period last year.
A reporter from Shell Finance and Economics found that when it comes to the decline in performance, the reasons given by the "three barrels of oil" tend to be the same: Affected by the epidemic, the global market has shrunk, and international oil prices have "clipped down".
Affected by this, the "three barrels of oil" loss sector is different. Sinopec's refining division lost more than 30 billion yuan, and the refining gross profit was RMB-13/ton. The most serious loss of PetroChina is in the sales sector, with a loss of over 10 billion yuan. The company said this was affected by factors such as the decline in domestic refined oil market demand and inventory reduction.
"The three companies have different emphasis and different resource allocation. Many factors have led to different profit and loss sectors." Han Xiaoping, chief information officer of China Energy Network, told Shell Finance reporter that PetroChina has more domestic oilfield resources, and my country has 200 million tons per year. Most of the crude oil production is produced by PetroChina.
Han Xiaoping told reporters that, by contrast, Sinopec has more imported oil. Since Sinopec’s “going out to sea” was late, the price of oil field extraction is not as low as that of western oil companies. Various factors make Sinopec more vulnerable to fluctuations in international oil prices. When oil prices go up, Sinopec’s refining sector makes more profits, and when oil prices go down, Sinopec’s refining sector loses more.
In addition, Han Xiaoping also pointed out that both PetroChina and Sinopec have undertaken more supply guarantee tasks. Affected by the current international situation, my country has certain requirements for crude oil reserves. Some Western private oil companies can reduce production when oil prices fall, but Sinopec refining If the gross profit is negative, part of the task of guaranteeing the supply must also be undertaken. CNOOC Limited differs from PetroChina and Sinopec in terms of management efficiency, resource allocation, and number of employees, which also results in different operating benefits.
Regarding the situation in the second half of this year, Han Xiaoping said that as the global economy recovers, if crude oil prices recover, the situation facing the "three barrels of oil" will ease. However, the current epidemic in the West has not resolved the crisis, and the oil price trend in the second half of the year remains to be seen.
Oil prices fell three barrels of oil directly calling the situation difficult "unprecedented"
Sinopec, which has just released its semi-annual report, said that in the first half of 2020, the company's turnover decreased by 31.3% year-on-year, mainly due to the impact of the epidemic and the plunge in international oil prices. The company's main product operating volume and realized prices fell year-on-year.
In addition, in the first half of 2020, Sinopec’s operating loss was 21.5 billion yuan, a year-on-year decrease of 70.6 billion yuan. Mainly due to the dual impact of the epidemic and the plunge in oil prices, the company's crude oil processing volume, chemical products and refined oil business volume declined, the prices of major products fell, inventory losses were large, and gross profit narrowed sharply.
Sinopec said that in the first half of 2020, the new crown pneumonia epidemic will spread globally, the world economy will be down, and the global market will shrink. In the first half of the year, the average spot price of Platts Brent crude oil was US$40.07/barrel, down 39.2% year-on-year. Demand for refined oil dropped sharply, and the growth rate of petrochemical product demand declined. The industry experienced unprecedented difficulties.
PetroChina also stated that in the first half of 2020, the spread of the epidemic led to a historical decline in world oil demand, severe oversupply in the global oil market, and a deep drop in international oil prices. During this time, the "Production Reduction Alliance" broke down the production reduction negotiations and launched a price war, and subsequently reached the largest production reduction agreement in history, which has an important impact on the international oil price trend.
PetroChina stated that due to the impact of the macro economy and the epidemic, the easing of supply and demand in the global oil market has further intensified, and the average international crude oil price has fallen sharply compared with the same period last year. Affected by the sharp drop in international oil prices and the severe contraction of domestic oil and gas demand, the Group's production and operations have encountered unprecedented shocks and challenges.
CNOOC directly referred to this round of fluctuations in international oil prices as a "cliff decline." CNOOC stated that the first half of the year just past was extremely unusual and extraordinary. We experienced the world’s worst public health crisis in a century and a global economic recession that has not been encountered since the “Great Depression”. The global oil and gas industry is in a downturn. The combination of low oil prices and the new crown pneumonia epidemic has had a huge impact on the company's production and operations, and the external situation facing the company's development is extremely severe and complex.
Sinopec: Refining Division loses 30 billion gross profit
From the perspective of profit, many of the five major sectors of Sinopec have suffered losses. Among them, the refining business unit suffered the most loss, reaching 31.689 billion yuan.
Regarding the refining business unit, which has the most significant losses, Sinopec said that the business of the refining business unit includes purchasing crude oil from third parties and the exploration and development business unit, processing the crude oil into petroleum products, and internally selling gasoline, diesel, and kerosene to marketing and distribution businesses. Some of the chemical feedstock oils are sold internally to the Chemicals Division, and other refined petroleum products are exported from the Refining Division to domestic and foreign customers.
The products of the Refining Division include gasoline, diesel, kerosene, etc., among which kerosene sales have fallen the most this year. In the first half of 2020, kerosene sales revenue was 24.4 billion yuan, a year-on-year decrease of 50.7%, accounting for 5.6% of the business unit’s operating revenue, mainly due to the sharp decline in jet fuel demand affected by the epidemic.
It is worth noting that the semi-annual report shows that in the first half of 2020, Sinopec's refining gross profit was RMB-13/ton, a year-on-year decrease of RMB 395/ton. Mainly due to the impact of the epidemic, the demand for petroleum and petrochemicals has decreased, and the gross profit has been sharply narrowed. At the same time, in the process of falling crude oil prices, the loss of raw materials and finished products inventory has been large.
The loss of the Exploration and Development Division was only better than that of the Refining Division, with a loss of 6.02 billion yuan.
Sinopec said that most of the crude oil and a small amount of natural gas produced by the Exploration and Development Division are used in the company's refining and chemical businesses, and most of the natural gas and a small portion of crude oil are exported to other customers.
In the first half of 2020, the operating income of the Exploration and Development Division was RMB 78.9 billion, a year-on-year decrease of 24.0%, mainly due to the year-on-year decrease in the sales prices of crude oil, natural gas and LNG. In the first half of 2020, the exploration and development division had an operating loss of RMB 6 billion, a year-on-year decrease of RMB 12.2 billion, mainly due to the impact of the sharp drop in crude oil prices. In the second quarter, the division had an operating loss of RMB 7.5 billion.
From the perspective of operating income, Sinopec’s five major segments have all declined in revenue, of which the most obvious decline is in the chemical business unit, headquarters and others.
In the first half of 2020, the chemical business unit achieved operating income of RMB 172.199 billion, a year-on-year decrease of 33.9%. The headquarter and others achieved operating income of RMB 484.625 billion, a year-on-year decrease of 37.1%.
According to Sinopec, the business of the chemical division includes the procurement of petroleum products as raw materials from the refining division and third parties, and the production, marketing and distribution of petrochemical and inorganic chemical products.
In the first half of 2020, the operating income of this business unit decreased year-on-year, mainly due to the decline in business volume and the decline in product prices. In the first half of 2020, the operating income of this division dropped by 73.1%, mainly due to the impact of the epidemic, the decline in demand for chemical products, the decline in prices, and the decline in gross profit of the chemical business.
CNPC's sales sector suffered huge losses CNOOC's business losses
Unlike Sinopec, PetroChina's sales sector suffered the most losses.
PetroChina's semi-annual report shows that in the first half of 2020, the sales segment achieved operating income of 749.203 billion yuan, a decrease of 23.8% from the 982.656 billion yuan in the first half of 2019, mainly due to the decrease in domestic refined oil sales and prices.
Affected by factors such as declining demand in the domestic refined oil market and reduced profits from inventories, in the first half of 2020, the sales segment's operating loss was 12.892 billion yuan, a decrease of 13.386 billion yuan from the operating profit of 494 million yuan in the first half of 2019.
In addition to the sales sector, Sinopec's second most loss-making sector is also the refining and chemical sector.
In the first half of 2020, the operating income of PetroChina's refining and chemical segment was 369.811 billion yuan, a decrease of 24.0% from the 486.366 billion yuan in the first half of 2019, mainly due to the decrease in sales and prices of refined products such as gasoline, diesel, and kerosene.
Affected by factors such as declining domestic market demand, falling prices, and reducing profits from inventories, in the first half of 2020, the refining and chemical sector will have an operating loss of 10.54 billion yuan, a decrease of 16.910 billion yuan from the 6.370 billion operating profit in the first half of 2019.
CNOOC's semi-annual report introduced that the group is engaged in upstream oil business globally, including conventional oil and gas business, shale oil and gas business, oil sands business and other unconventional oil and gas businesses. The group discloses its main business through three operating segments, including exploration and production, trading business and corporate business.
The semi-annual report shows that CNOOC’s exploration and production business has a combined revenue of 67.937 billion yuan and a profit of 10.485 billion yuan; the trading business has a combined revenue of 6.497 billion yuan and a profit of 192 million yuan. Revenue and profits of the two major sectors have declined.
In addition, CNOOC's corporate business suffered losses, reaching 323 million yuan.
Beijing News Shell Finance reporter Lin Zi editor Xu Chao proofreading Wu Xingfa